A private,not-for-profit hospital received contributions of $50,000 from donors on June 15,20X9.The donors stipulated that their contributions be used to purchase equipment for the hospital.As of June 30,20X9,the end of the hospital's fiscal year,$12,000 of the contributions had been spent on equipment acquisitions.In the hospital's general fund,what account would be credited to recognize the release of the restrictions on the temporarily restricted contributions used to acquire equipment?

Question

Quizplus · Accepted Answer

The account that would be credited to recognize the release of the restrictions on the temporarily restricted contributions used to acquire equipment would be the "Net assets released from equipment acquisition restriction" account. This is because when the restricted contributions are used to purchase equipment, the funds are temporarily restricted until the equipment is acquired. Once the equipment is acquired, the restrictions are released and the funds become unrestricted, which is reflected in the "Net assets released from equipment acquisition restriction" account. Options A and B are incorrect because revenue and financing sources do not accurately reflect the nature of the transaction. Option D is also incorrect because it only reflects the release of unrestricted net assets, whereas the contributions were previously restricted.

A Private,not-For-Profit Hospital Received Contributions of $50,000 from Donors on June